Top 5 traits family business should want for the next generation

passingkeyResilience and self-reliance

Life brings many challenges.  One of the greatest assets a person can have is the ability to handle adversity.  At the beginning of most family business stories is a story of overcoming adversity.  Too often the other end of the family business story is young people being handed too much too easily.  In the end this can be a great disservice to the next generation.

I know that as a parent we are anxious when we push our kids out into the world to find their way, but at the same time it is one of the most important gifts we can give them.  I am encouraging every family to have an employment policy that requires the next generation to go out and on their own for two years before joining the family business.

Healthy individual identity

Young people need to find out who they are outside the context of the family business.  I grew up in a family business that had great name recognition in our town and it was a good feeling.  But it was an even better feeling when I created my own accomplishments and began to know who I was outside of the family business circle.

When I got asked to lead at my Rotary Club, industry association, and Little League, I began to know my inherent strengths and leadership ability outside of business.  It was a great feeling.

I see a stark difference in the confidence and abilities of next gen’s who apply themselves and create success in areas outside of the family business.

When a healthy individual identity is created outside of the family business that person becomes 10 times more valuable inside the family business!

A fulfilling career

So many of us want to see the family business continue but I would rather see my children in careers that are personally rewarding.  We should encourage our children to explore and understand their strengths and find careers that play to these strengths. I see many 45 and 50-year-olds that find themselves 20 years into the family business career and are left unfulfilled, wondering if they should have pursued their passion.

Make sure, encourage, and demand that the next generation explores their strengths and passions fully before dedicating themselves to a career in the family business.

Emotional and financial security

Many family businesses give next gen’s a great leg up on the financial security piece but I find many times the emotional security and well-being is not great.

Family leaders should help next gen’s find out who they are, find rewarding and meaningful work, create a strong individual identity and then they will have the greatest combination of all: great emotional and financial security.

Happiness

Isn’t that what it should all be about?  I’m not trying to say life should be easy or simple but at the end of the day the greatest gift in life is to find happiness in all of our day-to-day trials and tribulations.

I see many people who sort of fall into the family business and then at some point look up and realize that they are not happy for a variety of reasons.  Life is short and we should help the youngsters learn how to be thoughtful and courageous about taking responsibility and setting their own course for happiness in their life.

Parents: Don’t let style differences implode your succession

personality

In case you haven’t noticed, we are all wired with different behavioral styles!  Look around and you’ll see it: fast and decisive, slow and methodical, spontaneous (and lacking accountability), and consistent and conservative.  See behavioral styles (and my acting ability) at work in a funny four minute video click here to watch the video.

The bottom line is people are wired a certain way and the sooner you accept that and work with it in a positive way, the better off you’re going to be.  I can’t tell you how many times I come across fathers and sons, or mothers and daughters who are pulling their hair out in frustration due to a reaction to the other person’s style.

I’ve had two sons in the past 10 days who are ready to leave the family business because dad insists that the business be run in his predominant style.  I understand mom and dad’s concern.  They know their approach has been successful so far in the family business and they are nervous that a different approach won’t be successful.  Many times mom and dad’s retirement is relying on the future success of the business.  There’s good reason to be nervous!

People today thrive on being able to express and work with their unique gifts and personality.  If you’re trying to smother that, stifle it, or flat out kill it off, you will run your children out of business and a potentially viable retirement plan (having your children buy you out of the business).

What you need to do is to identify the style differences so you can begin to speak to each other in each other’s language and build your team around styles and strengths.  Don’t try to make a methodical introvert your new sales leader and conversely don’t try to make a gregarious salesperson your controller!

A successful family business learns how to identify inherent talents and as Jim Collins says in Good to Great put the “right people in the right seats on the bus.”

The problem is too many times moms and dads get anxious and nervous with the next generation’s style.  That’s where governance comes in.  I just finished a project helping a family make a successful family business succession transition by helping the parents set up clear goals and accountability for the next generation leader and the business that must be met in order for the succession to be completed.  Click here to see a video with mom talking about the process.

So I’m not asking you to simply roll over and not worry about the style differences.  I’m suggesting that you embrace the differences, build your team and accountability measures keeping the behavioral styles in mind.

Most importantly, realize that we are all wired differently.  No style is better than another.  Stop making each other wrong for having unique styles and approaches, and start learning how to appreciate each other and set each other up for success!

 

Questions you should answer before leaving the family business

I can’t tell you how many times I hear frustrated family business members talking about making that final (and BIG) decision to leave the family business. I know firsthand what it feels like because I wrestled with the same decision for many years before calmly and peacefully reaching my decision.

That’s the important part. I always encourage those contemplating departure to make sure and explore every avenue of possibility before reaching their decision. Leaving the family business is a big decision. You want to make sure that you’ve done your due diligence in terms of your own thought process, as well as exploring others’ thought processes.

In most cases there isn’t a need for a quick decision.  In fact, take some time, give it some thought, and reach out for wise counsel from others who have been on a similar path. Uncle Walsh always said a fast decision is usually a bad decision. If you’d like to see a young man’s thought process, click here and watch the video of someone I coached during the process.

For the most part I’ve found that very few people regret the decision to leave the family business. Additionally, who says you can’t come back? I held that as a possibility in my mind. I figured if I ventured out and things didn’t go well, I would have felt better for having tried than the regret of never having tried at all. Doesn’t that sound like the old saying, “better to the loved and lost than never have loved at all?” “Better to venture out and fail than to never venture out all” -I absolutely believe that.

One of the most common reoccurring themes I hear with family business members in their mid-40s is the lingering question of “could I have done well out of my own?” It sounds a bit like a recent AARP poll of people’s top regrets at the end of their life. One is having “the courage to live a life true to myself, not the life others expected of me.”

I encourage clients to ponder a series of questions that will help them gain clarity during this very important process. Another thing I encourage folks to do is to be open and transparent with their family members about their own family business issues and disappointments and encourage them to go through your thought process with you.

My uncle and I had many conversations about areas of the business philosophy where we were not aligned. This allowed me to test my own resolve and conviction to my ideas and gauge his willingness or interest in changing directions. This was an important part of me getting to a peaceful and calm decision.

Leaving the family business will have an impact on you and those family members who remain. Sometimes when they ponder your exit, it gives them the impetus to make changes to improve the situation. Sometimes it doesn’t, but that’s okay, because at the end of the day, as a coach , what I want for you is to know that you gave it your best!

So set aside an hour and ponder the following questions. Being able to write your answers in a journal is a great way for you to be able to really explore your thinking, come back later and re-examine it. Make yourself write the answers to these questions.

◊Does the thought of leaving the family business excite you, scare you, frustrate you? As you look deeper what are your beliefs underlying those emotions?

◊Can you clearly articulate the number one reason why you want to leave?

◊Do you believe you’ve done everything in your power to bring forth needed change that would have you change your decision?

◊Is there anything else you could do? Are there any other resources you could bring to the table to try to bring an objective set of eyes to the situation?

◊Have you considered any sort of middle ground solution? Perhaps you could spend time getting retrained or retooled while still working in the family business. (I attended school at night and on weekends to get the necessary training to venture out to my next endeavor.)

◊If you fast-forward your life 20 years and look at the two roads; leaving the family business and not leaving the family business, what comes to mind? (Regardless of the amount of success have in your new endeavor?)

◊Do you have another job or profession you feel excited about going into? If not, have you considered spending more time contemplating that before you leave? Have you considered adjusting your own expectations so as to make your current situation more tolerable?

◊Have you solicited the input of:
      ◊Your family members?

      ◊Your significant other?

      ◊Your closest advisers outside the business?

◊Have you considered if you leave the business and it doesn’t go well, will you be okay with that? Would you ever consider coming back?

 

After you’ve answered all these questions, if you feel clear that it’s time to go then I encourage you to follow your heart. If you’re not 100% clear, I encourage you to give yourself time to get 100% clear or 100% committed to the decision. You have time.

My process for leaving my family business  was one of the most difficult and emotion filled decisions I ever made in my life. Now 15 years after that decision I still feel a great sense of pride for having the courage to venture out and still have no regrets.

The 9/11 crisis came shortly after I ventured out on my own. I knew failure was not an option. I have weathered the storm of one of the greatest economic recessions and still got two kids through college. Those challenges have been both daunting and extremely rewarding to have gone through. More than anything, going out on your own gives you the chance to put your money where your mouth is, put all of your hard work and focus on the line and really feel what it’s like to build something from the ground up.

There are no assurances within a new career change or new business endeavor. I do feel quite confident in saying if you stay miserable in your family business you will have squandered an opportunity to create a better life for yourself.

If I can help you in your process please lean on me. I’ll be glad to give you some time as my gift to you.

 

  • Posted by Pete Walsh
  • Thursday, April 11th, 2013
  • 1 Comment »

Ignoring poor performers in the family business can ruin your team

slacker-at-workIgnoring poor performance can do serious harm, not only to your team, but to the player who is under performing.

In the family business setting, it can often feel like you have to tell your family member they are “no good” and risk causing bigger, deeper conflicts in the family community.  But trust me, not dealing with it is going to cause bigger issues down the road.

That’s why I encourage all of my family business participants to build a “coaching culture” with their team so the team gets used to, and expects consistent, constructive performance feedback.

As one of my idols, John Wooden said, “Great coaches know how to give feedback without causing resentment.”  True coaching leaders create a partnership based upon trust, mutual respect and an unwavering commitment to performance excellence.  Their team members expect the coach to challenge them to bring out their best!

I’ve developed a simple three question approach that helps coaching leaders quickly diagnose performance issues and have a path to discussing the issue with the team member.  You can get access to this practice and all of our deliberate practices by clicking here.

Don’t ignore poor performance!  It can seriously undermine your team.  When your team members see company goals and mottos that are all about achieving greatness and see you turning your back on a poor performer, they will seriously question the integrity of the organization and you as the leader!

dilbert-slacker1

Use 1 sentence to strengthen/repair family relationships this weekend

The most successful family businesses I work with have strong, healthy relationships as a foundation of their family.

One of the fundamental skills we coach to maintain healthy relationships is the ability to show genuine appreciation for others even in the face of disagreement and turmoil.

Many clients tell me they are reluctant to say something nice about someone they’re angry with because they think they will be acting insincere or phony.

I believe you can be legitimately angry or disappointed and still be able to hold genuine appreciation.  Showing appreciation is like “making a deposit“ in your relationship account with someone.  Building positive energy in a relationship gives you more room to work on tough issues when they arise.

Practice this skill this weekend!  Are you ready?  You can do this!

Do this with as many people as you can in your family.  The stretch goal is to do it with the person you have either the weakest relationship or a strained relationship.

Here we go…

Say “I wanted to let you know what I really appreciate about you is…(fill in the blank)”

Examples:

  • …how dedicated you are to our family/our parents /your children/my children
  • …how much you care about everybody
  • …how hard you work at being a good _______(their profession)
  • …how you were always there for me

You get the idea?

Some clients tell me, “I would if I could think of one coach!”  And when I push and challenge them. they always come up with  something they appreciate and I’m often surprised how touching it is when they do.

So rack your brain – and come up with one.

Being able to observe and articulate redeeming qualities of someone is a skill in and of itself.  The sooner you build that muscle the sooner  you’ll have healthy strong relationships!

If you want free, full access to all of our deliberate practices, sign up here!

 

Deliberate Practice – Competitive mindset essential for long-term success

One of the patterns that threaten many family businesses is a waning sense of urgency and competitive fire in future generations.

It’s human nature.  The founders fought for their survival in the early years of the business.  Successive generations are raised with a certain amount of affluence and financial security.  They’ve never experienced the feeling of “fighting for your life” in business.  While this is a wonderful byproduct of great founders it can also rob future generations of an important business mindset.

I was really fortunate to have found some of my grandfather’s letters from the 1920s that chronicle the trials and tribulations of Walsh Bros., our 89-year-old family business.  Reading about how my grandfather was watching every penny helped me appreciate what it took to get past the survival phase in a successful business.

It’s the current generation’s job as leaders to foster and maintain a competitive mindset in the upcoming generations.  Why?  Because business is highly a competitive sport and today’s champions can quickly become tomorrow’s “has-beens”.

So how do you create that competitive mindset?  How do you make sure family members keep a healthy level of urgency?

I keep going back to Major league baseball and spring training.  Even the most successful, highly talented professionals go back to the basics every March.  As a family you need to create rituals and exercises that build a competitive mindset.  Like everything else it’s a muscle that needs to be trained.

We have a deliberate practice that makes the family reflect upon its own competitive mindset, as well as the competitive landscape of the business.  They have to identify a few new activities to keep building the muscle.  For free full access to the detailed instructions in our deliberate practice click here.

There are many different ways to foster a competitive mindset.  As a leader in the family business, keep getting creative and inventive about how you keep the competitive fire alive in the up and comers!

 

Deliberate Practice – How to Conduct a Great Family Meeting

One of my greatest joys coaching families is to see a whole family come together around a table and talk about the family business.  You can see all of the hopes, dreams and history of the family in one room.  You hear about what came before and get glimpses of what is to come in the future for the business.

Surprisingly though, most families aren’t quite sure where to start and how to conduct a successful family meeting.  Due to this apprehension, many families just don’t conduct the meeting, thus robbing the family of a real opportunity for collaboration and building the future of the family  business.

Many families have discomfort trying to “please all of the people all of the time” so the thought of a family meeting is filled with anxiety about how to successfully conduct the meeting.

In coaching, one of the fundamental tenets we teach is about what we call generous listening.  A great family meeting happens when you can get everyone in the room and ask a few of the right questions and then simply sit back and listen.  Okay, some times a facilitator or coach can bring out the shy people in the room and gently manage the people who won’t be quiet and find the right balance of talking and listening.

In our deliberate practice, How to Conduct a Great Family Meeting, we give you some simple step by step instructions that will enable you to not only have a successful family meeting, but also have a greater sense of hope and optimism for the future of the family and the business.

To gain free access to this and all of our other deliberate practices click here.

 

Deliberate Practice – Get Real by Getting Feedback

One of the greatest disservices you can do to yourself and your team is to not be honest with yourself about how others perceive you. I know how frightening it can be to put yourself out there and ask for straight, unfiltered feedback. Top performers are relentless about obtaining feedback.

I ask every client and team member to give me feedback on a regular basis. It still scares me a bit but I know not staying tuned in could have far more damaging consequences – like not having clients or teammates!

I know in my family business when I started getting feedback from others, it took the focus away from me just trying to win my family’s acceptance as a leader and challenged me to learn how to be effective with broader audiences.

In our Get Real by Getting Feedback deliberate practice we give you step by step instructions to getting feedback from others and most importantly doing something with it. Don’t ask for feedback and not be prepared to act upon it!

If you would like to get real and build some new muscle then I encourage you to get access to all of our deliberate practices here.

Family Business Pyramid – TRUST

Lack of trust, or mistrust, is a silent killer on most teams and in most family businesses.  The problem is, as trust erodes, people don’t talk about it.  People start withholding information, energy and communication.  Before you know it, relationships go from being flexible and fluid to brittle and broken.

High performing teams must learn how to call out the “elephant in the room” – a lack of trust.  Unfortunately trust can be a complicated subject.  In our Family Business Playbook™ we have a simple drill that allows teams to further explore trust based upon three key elements of trust; reliability, competency and character.

If you think your team is ready for the Measuring Trust drill, go here and get full access to this drill and our Family Business Playbook™.

Family Business Pyramid of Success

Sometimes I feel like Indiana Jones when I’m coaching and navigating my way through family business dynamics. There are hidden obstacles and traps around every corner!

I’ve been looking for the treasure map, the one diagram that would spell it all out – show us the way, keep us on track.  Of course there isn’t such a thing, but it hasn’t stopped me from looking!

One of the things that I came across in my travels was UCLA basketball Coach John Wooden’s Pyramid of Success.  I was drawn to Coach Wooden for a number of reasons; the simplicity of his message, the focus on effort and accountability rather than trophies, and his genuine and humble approach.  If you want to get the essence of John Wooden you can watch this short Ted talk. 

In 2010, I decided to follow his lead and create my own version of the Pyramid of Success – this time for family businesses.  What I like about the pyramid is that the lower blocks build the foundation for reaching the higher blocks.

Over course of this year I’ll be writing in detail my thoughts about each of the blocks in the Family Business Pyramid of Success™.

I want to highlight one of Coach Wooden’s core principles because it is a core principle of my business coaching. Wooden cited an idea from philosopher Cervantes that stuck with him.  “Cervantes said, ‘the journey is better than the end.’ ”  Wooden said that when you get to the final destination it can be a bit of a letdown.  He said that in working with his basketball players he felt that the practices were the journey and the game was the end.  The journey was the best part.

It’s the same when I look at the family business experience.  In my working for 16 years with my family business there were tremendous challenges, frustrations, excitement and disappointment.  When the business was sold, I began to realize that working at Walsh Bros.  had taught me so many things about life and who I was as a leader, a businessperson and a human being.

A family business provides unbelievable opportunity to find out who you are and who you want to become. The family business is a broader expression of who you are as a family.  Don’t be overwhelmed when you become frustrated and disappointed – see those challenges as an opportunity to be in the journey.  The journey is the best part.

Thank you for being here, and practicing to reach your potential.  I hope you’ll read these posts and apply yourself to the Family Business Pyramid of Success™.  Please give me feedback about this process and let me know any other way I can be a better coach for you.

Click here to get your copy of the Family Business Pyramid of Success ™.

Please be sure to forward this to anyone who might be looking to be successful!